Home Value Calculation
What can you do to calculate the value of your home? How do you know if the value of your home is going up or down?
It's the biggest question on the minds of homeowners: How much is my home worth? Maybe you just like to know if you're gaining in equity, losing equity, if you should think about selling, if you should invest in other property in your neighborhood, or if you should do some home improvements to your investment. Here are some tips on how to find out how much your home is worth without having to hire an appraiser.
• What's the outlook for homes in your area? How much are homes selling for in your neighborhood? You can ask you neighbors for this information, or you can have a realtor check the local realty listing.
• What are the homes in your area like? You want to compare the price you paid for your house, its condition, age, and etc., with similar pieces of property in your area: compare your two-story, three bed, two bath home with other two-story houses that have three bedrooms and two baths. You want to be comparing apples to apples.
• Is your particular real estate market experiencing a "buyer's market" or a "seller's market"? If it's currently a buyer's market, where homes are going for less than they normally would, find out how less homes are going for than their previous values indicate. If it's a seller's market, where homes are going for more than usual, find out how much more homes are going for than their previous values indicate.
• Is there an upturn or downturn in the future? Find out what real estate experts in your area are predicting for the future of your area. Will you see an improvement or a diminishment in the market?
• What are mortgage interest rates? What's the lowest interest rate you can get in your area? What's the highest?
• If you truly want to find out what your home is worth, put your home up for sale and see what kinds of offers you get. A good rule of thumb is that if the market is doing reasonably well in your area, take an average of the offers you're getting and add 3 percent, and you'll get the real value of your home.